In Q1 2024, the trend of DeFi went in one direction, up
— Messari (@MessariCrypto) April 18, 2024
DeFi TVL increased by 65.6% QoQ to reach $101 billion, this uptick was primarily driven by asset price appreciation and liquid restaking.
Explore the full report on the State of DeFihttps://t.co/6ZoyFJTv6w pic.twitter.com/awOtGZV5u1
Here’s how Ethereum boosts DeFi: +100 billion locked dollars!
full version at cointribune
The first quarter of 2024 has been marked by a spectacular rebound in DeFi. It now boasts a TVL (Total Value Locked) exceeding $100 billion. This resurgence is attributed to several factors, including Ethereum liquidity buyback initiatives.
Ethereum to the Rescue of DeFi
The decline in cryptocurrency prices during the second half of 2022 negatively impacted DeFi, resulting in a significant decrease in TVL. However, signs of recovery emerged in the fourth quarter of 2023, particularly due to the rise in Ethereum’s price.
This trend intensified during the first quarter of 2024, with the establishment of Ethereum liquidity buyback strategies by key players in the cryptocurrency market.
Ethereum Staking: A Growth Engine for DeFi
Staking (or yield farming) involves locking up crypto assets to:
- participate in the transaction validation process
- earn rewards.
It has recently become a pillar of DeFi.
Liquid staking allows users to maintain their spending power while earning interest on their staked assets. This practice has seen rising popularity. Lido, a liquid staking protocol for Ethereum, has played a significant role in this evolution by capturing over 60% of the market share in liquid staking.
EigenLayer: The Rising Star in the Ethereum Universe
In addition to staking, liquidity restoration protocols have also contributed to the growth in DeFi’s TVL. This is particularly the case with EigenLayer, which allows users to stake their Ethereum multiple times, thus increasing their potential returns. This innovative approach has attracted many investors, propelling EigenLayer’s TVL to $12 billion in the first quarter of 2024.
In any case, the explosive rebound of DeFi in the first quarter of 2024 demonstrates the resilience and potential of this innovative sector.
